He global dollar fell to a one-week low against its major peers on Tuesday, as traders assessed whether tariffs proposed by the president-elect of USA, donald trumpthey would be less aggressive than promised.
On Monday, the dollar fell against the euro and sterling after a report of Washington Post that Trump’s advisers were exploring applying duty only to sectors considered critical to US national security.
However, the currency regained some ground after Trump denied the report in a post on his platform. Social Truth.
He dollar indexwhich measures the currency against six rival currencies, was down 0.25% at 108.03 as of 0730 GMT, Reuters reported, after falling as low as 107.74 overnight, its lowest since Dec. 30. December.
On the second day of the year, the index rose as high as 109.58 for the first time since November 2022, largely due to expectations that Trump’s promised fiscal stimulus, reduced regulation and higher tariffs would boost growth. of USA.
“With major policy changes on the horizon, markets should be prepared for much more volatility ahead,” said George Saravelos, head of global currency strategy at Deutsche Bank. Regarding tariffs specifically, “there are likely to be multiple legislative and executive initiatives overlapping with successive deadlines and announcements throughout the year,” he added.
The euro zone has been a particular target of Trump’s tariff threats, and the euro added 0.18% to $1.0409, after jumping to a one-week high of $1.0437 on Monday.
“While Trump’s refutation of the original (Wall Street Journal) article has limited the euro/dollar reboundsome doubts about the potential breadth of tariffs could cause an overbought dollar to regain a little more of its recent gains,” said Chris Turner, global head of markets at ING.
The inflation in the 20 countries that share the euro rose to 2.4% last month from 2.2% in November, Eurostat said on Tuesday.
Meanwhile, euro zone households raised their inflation expectations in November, a survey by the European Central Bank (ECB).
“The persistent stickiness of inflation in services means the ECB is likely to continue cutting interest rates only slowly, even as the economic outlook remains poor,” said Jack Allen-Reynolds, deputy chief euro zone economist at Capital Economics.
The dollar gained 0.04% to reach 157.69 yen in Japanand previously rose as high as 158.425 yen for the first time since July 17, supported by rising bond yields. treasury bonds United States.
He yen It may also have been sold off as investors adjusted their positions earlier in the year, said Shinichiro Kadota, currency strategist at Barclayswho predicts that the dollar It will be 158 yen at the end of March.
He Canadian dollar rose 0.1% to 1.4315 against the greenback after Canadian Prime Minister, Justin Trudeauannounced that he will resign in the coming months. Analysts estimate that the former central banker Mark Carney would be the most market-friendly candidate.
Still, they felt that domestic political restructuring would not be enough to support the Canadian dollar, as the currency’s prospects remain tied to US tariff policies.
In cryptocurrencies, bitcoin fell 0.9% to $100,766, after trading at its highest levels since December 19.
Source: Ambito
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